Exposure of Region-Wide Wage Theft Nets Tens of Millions in Back Pay

Background: 

In April 2020, a minimum wage increase went into effect in the Indian state of Karnataka, one of the country's largest centers of garment manufacturing. Factory owners producing for leading apparel brands refused to pay. As a result, 400,000 garment workers across over a thousand factories were cheated of the legal minimum wage. 

Workers reported that the impact of not receiving this increase was concrete and significant: reduced access to food staples, lost housing, lost schooling for their children. 

This is the worst wage theft the WRC has documented in the global garment industry. Apparel brands were aware of the theft and allowed it to continue for nearly two years. By January 2022, factories collectively owed workers more than $58 million, per WRC calculations. 

In early February of 2022—after a successful lawsuit by the Garment and Textile Workers’ Union (GATWU), after months of engagement with brands by the WRC, and after a growing list of labor rights advocates brought their voices to bear—India's largest garment manufacturer, Shahi Exports, announced that it would begin paying its 80,000 employees in Karnataka the correct minimum wage. The company also committed to pay all arrears, to both current and former workers. Other factory owners in the state soon followed suit. Payments to workers commenced in February 2022 with payouts scheduled over the subsequent months.